Reply to Yes, tiny violin - did anyone else struggle first years of law partnership?

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Reply to "Yes, tiny violin - did anyone else struggle first years of law partnership?"

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]If a newly minted equity partner is actually bringing home less than a senior associate the firm is poorly managed.  Our firm saw to it that that was never the case.  [/quote]

You are nuts.

A senior associate will be making 500k ---- partners say 650 for first year -- so they are making more.  But take home and draw are a lot less.

Senior associate may be, after taxes is brining home 18,000.  That is what they have been getting for last bunch of years.  Same firm -- new partner draws probably 12,000.  Why so much less if they are making 150k more?  Most firms pay partners on the back end.  Associates get paid up front plus bonus.  In addition  you end up paying 3,000 a month for health insurance when a partner because you pay both the employee and employer portions yourself.  Plus most firms have manadatory retirement contributions that eat up money.

You make more but your day to day cash flow is less.  By a lot.  In year 2 it is a little better as the firm may have paid you 100k plus as the rest of your comp.  But that will come months after the new year.  Year 3 is better and so on.  And comp is rising.  650 for a first year is probably 750 plus as a third year so the draw increase to maybe 17,000 up from 12,000.

I am a 20 year partner with 1.8 in comp.  My monthly draw is around 35k.  There are counsel at my firm with higher take home.  What they do not get is the rest of my money later on.  So for 2023 in May 2024 I will get 500k.  The rest is taxes, retirement, capital, etc.[/quote]

I mean, I guess . . .

I was promoted from counsel to equity partner at a major DC firm around 20 years ago.  At the time of my promotion I was one of the higher paid counsel and made a lot more than an eighth year associate.

My first year as a partner I made $450k.  I remember it distinctly.  I also remember making more than I did as a counsel that first year even after expenses were taken out.

I don’t remember my monthly draw, though.  Maybe it was lower than my monthly pay as counsel, but it’s not like we spent every cent that I made as counsel so I don’t recall money ever being tight.

In other words, there was really no “adjustment” necessary for us, at least not that I remember.

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